ENP Newswire -
Release date- 06082014 -
This compares to second quarter 2013 net income of
Adjusted non-GAAP net income for the second quarter 2014 was
Consistent with some analysts' practice of matching realizations to settlement months and making certain other adjustments in order to exclude one-time items, adjusted non-GAAP net income for the second quarter 2014 excluded a previously disclosed non-cash net loss of
During the second quarter 2014, the net cash outflow related to settlements of financial commodity derivative contracts was
For the first half 2014, EOG posted strong financial metrics driven by reinvestment of capital into high rate-of-return drilling opportunities. Discretionary cash flow increased 22 percent and adjusted EBITDAX advanced 24 percent.
In addition, adjusted non-GAAP earnings per share increased 46 percent, compared to the first half 2013.
The board of directors increased the cash dividend on the common stock by 34 percent. Effective with the dividend payable
'EOG's bottom line is a reflection of our top quality drilling operations and return focused capital investments,' said William R. 'Bill' Thomas, Chairman and Chief Executive Officer. 'Because EOG has demonstrated its ability to sustain crude oil growth and reinvest cash flows in high return assets, we've increased the common stock dividend for the second time this year, enhancing long-term value for our stockholders.'
In the U.S., crude oil and condensate production increased 33 percent in the second quarter 2014, compared to the same prior year period. Production gains from the South Texas Eagle Ford and North Dakota Bakken led EOG's U.S. crude oil production growth.
Driven by the South Texas Eagle Ford and the
EOG expanded its inventory of crude oil plays with successful drilling results in the Second Bone Spring Sand, which underlies its extensive
EOG has 100 percent working interest in the Jolly Roger 16 State #1H, which had an initial production rate of 1,450 Bopd with 210 Bpd of NGLs and 1.5 MMcfd of natural gas. While EOG estimates the play may be prospective over the majority of its 73,000 net Leonard acres, evaluation and confirmation is ongoing.
Across the Second Bone Spring Sand, EOG's production mix is estimated to be approximately 70 percent crude oil with average estimated gross reserves per well of 500 thousand barrels of oil equivalent. Plans are to drill several more wells in the Second Bone Spring Sand in 2014 and increase activity in 2015.
Over the last 12 months, EOG has systematically tightened spacing from 660 to 300 feet between wells to test production interference between Leonard 'A' wells. InLea County, EOG completed a 500-foot spacing test by drilling the Dragon 36 State #05H, #06H, #07H and #08H. The wells were turned to production at initial rates of 1,100, 1,500, 1,270 and 1,360 Bopd, respectively. EOG has 100 percent working interest in these Leonard 'A' zone wells that had associated NGL production of 200, 195, 235 and 235 Bpd and 1.1, 1.1, 1.3 and 1.3 MMcfd of natural gas, respectively.
The most recent successful pilot in
In addition, EOG has completed two strong Leonard 'B' zone wells, one drilled as part of a two-well pattern offsetting an 'A' zone well. In
Offsetting the Mercury State #2H by 250 feet, the Mercury State #1H was completed in the 'A' zone at 1,700 Bopd with 360 Bpd of NGLs and 2.0 MMcfd of natural gas. EOG has 100 percent working interest in these three wells. Positive initial results from the Falcon 25 Fed #2H and the Mercury State #2H wells support additional downspacing tests of the Leonard 'B' zone.
Using early production results from the tightly spaced Gemini 'A' zone wells and the Mercury State wells drilled across zones 'A' and 'B', EOG is evaluating various downspacing options that could significantly increase the number of drilling locations across its Leonard acreage.
'The Second Bone Spring Sand is yet another example of how EOG organically increases its high return crude oil inventory. Its potential, combined with downspacing results from the
EOG's South Texas Eagle Ford crude oil play again contributed significantly to total company second quarter crude oil production growth. Associated NGL and natural gas production also contributed to total company growth. Maintaining a robust drilling and completion program across its Eagle Ford acreage, EOG is further improving individual well results by modifying completion techniques and reducing drilling days.
In the North Dakota Bakken, EOG is concentrating activity on its Core acreage in Mountrail County. Well productivity is improving markedly due to continued refinements in completion designs. Three Core wells, the Wayzetta 43-0311H, 44-0311H and 45-0311H, were completed during the second quarter at 1,505, 2,410 and 2,690 Bopd, respectively. EOG has 75 percent working interest in these wells.
EOG continues to drill and evaluate production data from various spacing patterns in order to maximize the value of this asset. In addition, EOG plans to drill several Three Forks wells to test various benches of this play on both its Core and Antelope Extension acreage during the remainder of 2014.
A number of wells are targeted to begin production in August through year-end. EOG plans to test well spacing patterns and various completion techniques in both the Codell and
'To summarize our position, EOG is extending its lead as the largest crude oil producer in the onshore U.S. Lower 48. We continue to grow the size and quality of our drilling inventory by generating excellent new plays internally and increasing the drilling potential of our existing plays,' Thomas said. 'EOG is leading its peers in terms of barrels per day of crude oil growth, while our forecast ROE and ROCE metrics exceed the average of all upstream energy sectors, including the majors.'
Crude Oil and Natural Gas Hedging Activity
For the period
For the period
For the period
EOG is targeting 29 percent total company crude oil production growth in 2014. Total company production is expected to rise 14 percent, an increase from the previous 12 percent estimate. Capital expenditures are anticipated to range from
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations, performance, business strategy, returns, budgets, reserves, levels of production and costs, statements regarding future commodity prices and statements regarding the plans and objectives of EOG's management for future operations, are forward-looking statements.
EOG typically uses words such as 'expect,' 'anticipate,' 'estimate,' 'project,' 'strategy,' 'intend,' 'plan,' 'target,' 'goal,' 'may,' 'will,' 'should' and 'believe' or the negative of those terms or other variations or comparable terminology to identify its forward-looking statements. In particular, statements, express or implied, concerning EOG's future operating results and returns or EOG's ability to replace or increase reserves, increase production, generate income or cash flows or pay dividends are forward-looking statements.
Forward-looking statements are not guarantees of performance. Although EOG believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct.
Moreover, EOG's forward-looking statements may be affected by known, unknown or currently unforeseen risks, events or circumstances that may be outside EOG's control. Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others:
the timing and extent of changes in prices for, and demand for, crude oil and condensate, natural gas liquids, natural gas and related commodities;
the extent to which EOG is successful in its efforts to acquire or discover additional reserves;
the extent to which EOG is successful in its efforts to economically develop its acreage in, produce reserves and achieve anticipated production levels from, and optimize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects;
the extent to which EOG is successful in its efforts to market its crude oil, natural gas and related commodity production;
the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, transportation and refining facilities;
the availability, cost, terms and timing of issuance or execution of, and competition for, mineral licenses and leases and governmental and other permits and rights-of-way, and EOG's ability to retain mineral licenses and leases;
the impact of, and changes in, government policies, laws and regulations, including tax laws and regulations; environmental, health and safety laws and regulations relating to air emissions, disposal of produced water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations imposing conditions or restrictions on drilling and completion operations and on the transportation of crude oil and natural gas; laws and regulations with respect to derivatives and hedging activities and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities;
EOG's ability to effectively integrate acquired crude oil and natural gas properties into its operations, fully identify existing and potential problems with respect to such properties and accurately estimate reserves, production and costs with respect to such properties;
the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully and economically;
competition in the oil and gas exploration and production industry for employees and other personnel, facilities, equipment, materials and services;
the availability and cost of employees and other personnel, facilities, equipment, materials (such as water) and services;
the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise;
weather, including its impact on crude oil and natural gas demand, and weather-related delays in drilling and in the installation and operation (by EOG or third parties) of production, gathering, processing, refining, compression and transportation facilities;
the ability of EOG's customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their obligations to EOG;
EOG's ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all, and to otherwise satisfy its capital expenditure requirements;
the extent and effect of any hedging activities engaged in by EOG;
the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions;
political conditions and developments around the world (such as political instability and armed conflict), including in the areas in which EOG operates;
the use of competing energy sources and the development of alternative energy sources;
the extent to which EOG incurs uninsured losses and liabilities or losses and liabilities in excess of its insurance coverage;
acts of war and terrorism and responses to these acts;
physical, electronic and cyber security breaches and
the other factors described under Item 1A, 'Risk Factors', on pages 17 through 26 of EOG's Annual Report on Form 10-K for the fiscal year ended
In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and, if any of such events do, we may not have anticipated the timing of their occurrence or the extent of their impact on our actual results. Accordingly, you should not place any undue reliance on any of EOG's forward-looking statements.
EOG's forward-looking statements speak only as of the date made, and EOG undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.
As noted above, statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include 'potential' reserves and/or other estimated reserves not necessarily calculated in accordance with, or contemplated by, the
Investors are urged to consider closely the disclosure in EOG's Annual Report on Form 10-K for the fiscal year ended
Tel: (713) 651-6364
Tel: (713) 571-4676
Tel: (713) 571-4902
Tel: (713) 571-3870
Most Popular Stories
- Bently Creates Alabama Small Business Commission
- Bolivar Appointed to NSHMBA National Board
- When to Say No to Investors, Yes to Mentors
- SBA Kicks off Hispanic Heritage Month
- Rosneft Growth Slowed by Western Sanctions
- Duke Energy, Strata Partner on Big Solar Project
- Ukraine Offers Temporary Autonomy to Rebel-held Areas
- Thousands Risk Losing Health Care Aid
- Lindsay Lohan Claims She Handled Whitney Houston's Body Bag
- Cat Stevens Touring U.S., First Since 1970s